At 16.42 hours on 3 Nov 1942 the unescorted and unarmed Porto Alegre (Master José Francisco Pinto de Medeiros) was hit on the starboard side in the engine room by one torpedo from U-504 while steaming on a non-evasive course at 8 knots in fine weather about 150 miles southeast of Port Elizabeth. Lookouts spotted the torpedo track about 160 feet at right angles to ship, but it was too late to take evasive action. At 17.15 hours on 2 November, the Porto Alegre had picked up eleven survivors and their lifeboat from the Laplace which had been sunk by U-159 (Witte) on 29 October. The Brazilian crew abandoned ship in two lifeboats after distress signals were sent and all British survivors left together on a raft because their boat had been secured on #2 hatch instead of being ready to be launched again. The U-boat surfaced after about 15 minutes and questioned the survivors, asking about the name of the ship, tonnage and from where to where bound. The Germans gave them their position and course to the nearest land and drew the attention of the master to two men clinging to a raft, who were subsequently picked up by the lifeboat. They were also seen to take photos of the survivors and wreckage after sinking Porto Alegre. She broke in two and sank after being hit on the starboard side amidships in the boiler room by a coup de grâce at 17.20 hours with the fore part sinking immediately and the after part foundering after remaining afloat vertically with the screw high in the air for about two minutes. Poske had used his last torpedo for this of which he was not sure if it will run correctly as the G7a torpedo had been damaged when moved from the upper deck container into the torpedo room on 29 October, but one of the machinists had repaired it in a work that lasted for days.

The eleven British survivors joined the 15 men in the lifeboat in charge of the master after the U-boat left the area, while the remaining 32 survivors were in the second boat. There were no casualties and only three crew members reported injuries, but one of them suffered from a very bad hernia and subsequently died in the boat of the master and was buried at sea on 6 November. The lifeboat from Laplace had floated off the sinking ship, but was useless and left behind after all supplies and gear was transferred to the very poorly equipped Brazilian lifeboat with lights dated 1910. The British survivors later reported that they set sail and steered towards the coast while the Brazilian survivors seemed not at all concerned about the incident and lay down to sleep. During the second day a blind passenger was discovered when a rat ran up the leg of the master and disappeared between the buoyancy tanks. During the afternoon on 5 November, their boat was sighted by an aircraft that informed them about a nearby corvette, but the vessel apparently failed to find the lifeboat due to a heavy rainstorm during the following night. The master was later praised by the British survivors for his handling of the lifeboat in the bad weather and the use of the strong wind on 6 November until spotting land in the evening. Four aircraft were observed during that day but they had no means to attract their attention. At daybreak on 7 November, they ran the boat through the surf onto a beach about 50 miles from Port Elizabeth, temporarily running aground on a sandbank but eventually being carried straight up on the beach by a wave. All men and the rat made it safely ashore. The survivors were assisted by a local resident, who served them tea before they were taken to a hospital at Port Elizabeth by trucks of the South African military. They stayed in Port Elizabeth for about 16 days and were joined by the occupants of the other boat that had been picked up by the South African armed trawler HMSAS Africana (T 01) about 51 miles 131° from Cape Reciffe at 02.45 hours on 5 November.